The corporation uses the absorption costing approach to cost-plus pricing described in the text to set prices for its products. Based on budgeted sales of 85,000 units next year, the unit product cost of a particular product is ₱30.60. The company's selling, general, and administrative expenses for this product are budgeted to be ₱926,500 in total for the year. The company has invested ₱580,000 in this product and expects a return on investment of 11%. The markup on absorption cost for this product would be closest to: a. 12.0% b. 38.1% c. 11.0% d. 46.6%
The corporation uses the absorption costing approach to cost-plus pricing described in the text to set prices for its products. Based on budgeted sales of 85,000 units next year, the unit product cost of a particular product is ₱30.60. The company's selling, general, and administrative expenses for this product are budgeted to be ₱926,500 in total for the year. The company has invested ₱580,000 in this product and expects a return on investment of 11%. The markup on absorption cost for this product would be closest to: a. 12.0% b. 38.1% c. 11.0% d. 46.6%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The corporation uses the absorption costing approach to cost-plus pricing described in the text to set prices for its products. Based on budgeted sales of 85,000 units next year, the unit product cost of a particular product is ₱30.60. The company's selling, general, and administrative expenses for this product are budgeted to be ₱926,500 in total for the year. The company has invested ₱580,000 in this product and expects a return on investment of 11%. The markup on absorption cost for this product would be closest to:
a. 12.0%
b. 38.1%
c. 11.0%
d. 46.6%
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